Sustainable Vision

Recently, we wrote about how the sheer number of decisions leaders make suggests that good leaders must prioritize the decisions we make in order to spend the most energy on the most important decisions and not waste time and energy on minor decisions, which can be equally draining, but not nearly as potent toward achieving our goals.

Nowhere is this more true than in a board governance setting. Many boards, committees, councils, and other deliberative governing bodies follow a rather standard meeting agenda order:

Minutes;

Reports (typically moving from the lowest order of precedence to the highest, e.g., minor committee to major committee to lesser officer to greater officer);

Old or Unfinished Business;

New Business; and

Adjournment.

Unfortunately, what typically happens is that boards spend their freshest mental energy on the most mundane, and then have very little left for items of real importance that come later. This means that, without meaning to, many boards reduce their own capacity for doing their real work - leading and governing the organization on behalf of its constituency - by pushing the minor to the beginning and the major to the end. Their decision making process may be good, but they inadvertently create inverted priorities by putting the most mundane first.

Therefore, boards with good process policies create a different order of operations, and focus on specific overarching values, so that they can focus on the important when they have the freshest mental energy. Here are the seven things these boards do:

1. They prepare for the meeting by sending out all the reports ahead of time, including the minutes. They assume everyone will read them before the meeting. Any corrections to the minutes (usually typos) can be taken care of here.

2. They minimize meeting time spent on items for which action is required but everyone consents by combining all the reports requiring no action and the minutes into a consent agenda at the beginning, so that only if there is an objection does any discussion happen.

3. They prioritize the remaining reports so that their most significant decisions can come about with the freshest minds.

4. They stick to a schedule by putting time limits on reporting, discussion and debate so that if the body is not ready to make a decision on one item, others may still receive a fair hearing.

5. They set clear boundaries on their role, and that of staff or management, so they only focus on what their responsibility is, delegating the rest to others.

6. They make decisions once, by making them clear and broad rather than technical and limited, which requires checking back in (repeatedly) after the fact and reopening issues.

7. They maintain strategic perspective by adjourning with a sense of (or even an agenda for) what is next for the following meeting, or even several meetings down the road.

Boards that do these things find that they make better focused decisions in areas that are solely their responsibility. They can remain focused on honing vision and clarifiying priorities that propel their organization forward and keep them from getting too entangled in the web of non-essentials.

A few weeks ago, I wrote about gaining clarity in non-profit restricted funds. Reader feedback has inspired me to write a little more on the subject to help bring clarity to funds whose restrictions are often vague.

Many nonprofits (particularly churches) have funds that are collected for a designated purpose that is so broad that it is hard to allocate the funds. Often, this is because the collection of these funds is laden with assumptions about their use. In addition, when the funds are received, the only controlling document is a event program / bulletin or the verbal expression of purpose of the fund. In most cases, this is the most clarity the fund holds.

Conflict then erupts when the use of the funds is applied. Organizations with funds like these operate on precedent – since there is no resolution or solid designation from the donors, they can do little else without effort. Nevertheless, precedent is squishy and memories differ in the first place.

In this case, the best option for organizations with such funds is to create a solid fund usage policy and a process for reviewing requests for disbursements and distributing funds. The process needs to be financially accountable, using normal levels of internal controls common to healthy organizations: no one person controls the transaction from start to finish, decision-makers are confined to those without conflict of interest, standards of review and approval exist and are followed, no one writes checks to cash (or themselves), and so on. Most importantly for the process, the Fund Usage Policy creates the framework in which the process operates.

The Fund Usage Policy basically answers the questions known to beginning essay-writers everywhere: who, what, where, when, why, how (and in this case, how much). For example:

Why does the fund exist? Why does the fund need a policy to govern it? Why is there a need for the fund / what need inspired a person or persons to set the fund up in the first place?

What are the organization’s goals for the use of the fund? What does the organization intend to accomplish with the fund? What written donor-based restrictions exist? What verbal donor-based restrictions exist? What review process exists (or can be created) to measure whether the goals are being met in practice?

Who is eligible to request funds? Who is eligible to receive funds? Who reviews the requests? To whom is the requester / recipient / reviewer accountable? Who sets the policy or may change the policy for the use of the fund? Who are the fund’s donors? Who are the fund’s recipients / beneficiaries?

Where are the funds held? Where will future contributions be collected or received? From where will disbursements be issued? Where is the fund’s information kept? Where do those requesting funds go to make their request?

When did the fund originate? Is there any passage of time that could cause the fund’s restrictions to expire? When does the fund make disbursements? When does the fund accept requests? In what time frame does the fund respond to requests? In what time frame is the fund’s activity reviewed?

How much may be requested in any one request from the fund? How much is the average request? How will requests be made? How will review take place? How will accountability be maintained? How will disbursements be made? How will contributions be received? How will the fund’s assets be managed?

If your organization can build consensus around those questions, you will be able to use your restricted funds with clarity and integrity. This will break through the unspoken and unwritten assumptions and help your organization speak clearly to how it uses its funds.

Design Group International Consultants are available to assist your organization in finding clarity on fund usage and implementing accountable solutions so that your organization can accomplish its purpose. Contact Senior Consultant Matthew M. Thomas at 1.877.771.3330 x20 or at matthewt@designgroupintl.com for assistance on fund clarity. You can also follow him on twitter @mattthomasdgi for updates on Sustainable Vision.